This paper estimates a structural model of the employment decision of the firm. Our establishment level data displays an extreme degree of rigidity in that employment levels are largely constant throughout our sample. This can be due to the fact that establishments face large shocks but also...

What was the role of uncertainty in the Great Depression? This paper uses a calibrated general equilibrium model to show that, in response to an increase in uncertainty, agents "increase" expenditure on irreversible durable goods and reduce investment in irreversible physical capital. These...

Using Danish register data we observe that households living in rental housing subject to rent regulations pay lower rents and have a lower expenditure share than households living in unregulated housing. We set up a model with rent control on a fraction of the housing stock, an explicit...

This paper explores the behavior of the U.S. economy during the interwar period from the perspective of a model in which the existence of non-convexities in the intermediation process gives rise to a multiplicity of equilibria. The resulting indeterminancy is resolved through a sunspot process...

This paper investigates the quantitative implications of two business cycle models in which aggregate fluctuations arise in response to variations in the process of financial intermediation. In the first, fundamental shocks in the capital accumulation process lead to fluctuations in the real...

This paper investigates Romer's (1990) hypothesis linking uncertainty caused by the October 1929 crash with durable expenditure movements and the start of the downturn. The author estimates conditional variances for macroeconomic data, and computes the variance of stock returns. These goods are...

Evidence of the statistical significance of profits in Q regressions remains one of the principal findings in the empirical investment literature. This result is frequently taken to support the view that capital market imperfections are an important element for understanding investment. This...

Partial equilibrium models suggest that when uncertainty increases, agents increase savings and at the same time reduce investment in irreversible goods. This paper characterizes this problem in general equilibrium with technology shocks, additive output shocks and shocks to the marginal...

This paper adds a quasi-network to a search model of the labor market. Fitting the model to an average unemployment rate and to other moments in the data implies the presence of the network is not noticeable in the basic properties of the unemployment and job finding rates. However, the network...

The European Commission wants to implement a single market for gas. One of the components of this market is a regulated provision for "security of supply" which consists of rules for the implementation and use of a given reserve stock of gas. We investigate the impact of this policy on the...